ISLAMABAD - The Federal Board of Revenue (FBR) has faced massive shortfall of over Rs155 billion in tax collection during first half (July-December) of the ongoing financial year 2016-17,
The FBR has provisionally collected Rs1460 billion during July-December of FY2017 as against the target of Rs1615 billion, making shortfall of Rs155 billion. “We have collected Rs375 billion in the month of December against the target of Rs392 billion,” said FBR spokesperson Dr Muhammad Iqbal. He said that figure would finalise in the first couple of days of next week.
“The government has now left with two options, either to take new revenue generation measures or to slash the annual tax collection target,” said an official of the Ministry of Finance while talking to The Nation. He said that revenue shortfall increased due to keeping oil prices unchanged and paying huge refunds to the exporters during six months of the current fiscal year.
Pakistan had already agreed with the International Monetary Fund (IMF) for announcing mini-budget for meeting its tax collection and budget deficit target. The government had fixed tax collection target at Rs3621 billion for the present financial year (July 2016 to June 2017).
FBR chairman Nisar Mohammad Khan had already admitted that tax collection target is unrealistic. During Senate Standing Committee on Finance and Revenue, he said that revenue collection target of Rs3.62 trillion was high and seemingly unrealistic.
Decline in non-tax revenues and lower than expected tax collections, contributed towards a rise in the deficit during Q1-FY17. Pakistan’s budget deficit has jumped to Rs437.9 billion during the first quarter of the ongoing financial year. The country’s expenditures were recorded at Rs1,300.1 billion as compared to revenues of Rs862.2 billion, taking the deficit to Rs437 billion (1.3 percent of the GDP) during July-September of the fiscal year 2016-17.
The government might struggle to restrict budget deficit at 3.8 percent of the GDP (Rs 1.276 trillion) during ongoing fiscal year due to massive shortfall in tax collection as well as non-tax collection.